WHY YOU SHOULDN’T FEAR HECS - PART 1

HECS (properly called HECS-HELP) is one of the most misunderstood Government programs in Australia. Certainly it's one that creates the most fear and mistrust among young Australians and one that generates a lot of questions here at Sherpa HQ.

In part, I suspect, this is a result of the Government's portrayal of it as a loan rather than just an income tax surcharge on graduates. Understanding this distinction won’t make it cost you any less but it will hopefully make you feel better and remove some of the anxiety about having to carry around this debt burden.

First, a bit of background

The benefits of attending university accrue partly to the student through higher lifetime income and partly to the nation as a whole. In truth a significant amount accrues to the shareholders in breweries, but that is a story for another day. Many countries have grappled with the right way to divide up the cost between the various beneficiaries.

Until the 1970’s universities charged their students fees